Law firms and records management

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The Legal Industry
Records Management and Litigation Support Services

By Cary McGovern

Law firms generate and maintain huge volumes of records. Most legal records are legal case files called "matters." Litigation work is the most prolific of all legal files, and it is not uncommon for a single matter to generate several boxes of files. In mass-torte litigation, matters may generate hundreds or thousands of files and boxes. Law firms widely use off-site storage and require many services to assist them with their work. This column will describe the idiosyncrasies and nuances of the legal market.

Law firms and records management

Lawyers, pound-per-pound, out-weigh even oil companies with the number of file boxes in storage. It is safe to say that law firms have long been the "usual suspects" for records management services. This has been true for many reasons. However, the legal industry is under great pressure to change the way it does business. Clients are weary of paying endless hourly fees to lawyers without a lot of accountability or measurability. Today, law firms are under pressure to change the way they bill their customers, and it's now becoming common practice for a law firm to sell its services on a fixed-price basis rather than on the traditional hourly rate. Additionally, the Association of Legal Administrators (ALA) and the American Bar Association (ABA) have recently issued recommendation statements to their members concerning charge back of "marked-up" services to their clients. As you may know, law firms have traditionally billed for copies and courier services at cost plus a profit margin, e.g., copy costs are 25 cents per page.

Legal records as case files

Legal records are typically set up in file folders and file pockets called "red-wells." Clients usually have several matters. Red-wells are usually four-inch filing media in which file folders are inserted. A legal file may have several standard components called "sub-files." These sub-files are normally inserted into red-wells.

Law firms will normally have three levels of filing:

  • Current files at the legal secretaries' work stations in red-wells.
  • Central file rooms in red-wells.
  • Off-site storage; red-wells in boxes.

When cases or matters close, they are usually boxed up and sent to an off-site location for storage. Law firms generally use everything from self-storage facilities to commercial records centers and everything in between. I have seen legal case files records stored in very unusual places. I know of one law firm with about 200 lawyers in four California locations that have 55,000 cartons of records in three off-site storage facilities and more than 100,000 red-wells on site. Records are everywhere and are choking their internal operation.

Indexing and retrieval services

Since each legal file that comes to storage specifically references a client and matter, it is a great candidate for indexing services. Indexing is the method of creating a reference database for each file and sub-file in every box. This enables faster retrieval and identifies the inventory at a more detailed level to help locate files more easily.

It is safe to say that legal records are quite volatile. Lawyers "want what they want, when they want it." This requires fast retrieval and delivery services, usually within one hour of the request. This type of delivery is actually quite profitable. Commercial records centers can use independent-contractor couriers for "hot-shot" delivery service and charge as much as $50.

Additionally, case or matter files are among the highest retrieval requirements on a regular basis in any commercial records center. Lawyers constantly re-use documents from older matters or case files, so they refer back to old files consistently. Retrieval revenue sometimes exceeds storage revenue for law firms.

Litigation support services

Litigation support is a complex issue, but I will keep this discussion fairly simple. Litigation support is a fairly new phenomenon. It is the result of an attempt to reduce or control the cost of large lawsuits or litigation matters. The primary reason for its emergence is to reduce the professional (lawyer) time (usually billed at $300 per hour or more). Paralegals are more often than not the case file managers for the document assembly and review processes. Their job is to go through the mountains of paper and determine what is worthy of lawyer review. They commonly separate documents into three types: hot, medium and cold. The hot documents are usually very important and are available in full-text search. The medium documents are indexed to several key indices and maintained in databases. The cold documents are indexed at the red-well or file level for possible future use. It is common that copies or scanned images are made of many of the documents that are reviewed.

Commercial records centers can offer many of the services that are embedded in these litigation support activities. Several are listed for your information:

1. Document repository management: You can provide separate space for document storage as well as work space for the support staff. Sometimes the staff works for the outsourcer.

2. Copy production management: On-demand copying, packaging and shipping of specific documents for discovery--the legal term for the acquisition of information or specific data from the opposing client or council--and co-council work assignments.

3. Indexing services: Creation of database references for documents, files, sub-files and boxes.

4. Document imaging services: The imaging process is much like a combination of indexing and copying. Documents are scanned and indexed to several references and stored electronically in document form on electronic media.

5. All of the above: Some commercial records centers specialize in litigation support and offer all of these services and more. Although this service requires a high level of expertise, it is quite profitable.

The legal market is a great place to start when you are developing your prospect list. Even small law firms are good prospects. Remember that the more services you provide, the better your chance to capture the business.

Next month we will explore the medical market and medical records management.

Regular columnist Cary F. McGovern is a certified records manager and owner of File Managers Inc., a records-management consulting firm that also provides outsourcing services, file-room management and litigation support services for the legal industry. For more information about records management, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail: fileman@acadiacom.net  or Web: www.fileman.com.

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